Facing limited access to capital in their own countries, and unable or unwilling to borrow from local banks or other lenders, a growing number of equipment buyers overseas are seeking export financing from their US suppliers.
Kadland Capital arranges export financing for all kinds of capital equipment, as long as the buyer is a well-established creditworthy company located in one of the many foreign markets where Kadland Capital does business.
The equipment can be manufactured in the USA or in other countries. Likewise, the equipment can be shipped from the USA or elsewhere, although for some export financing transactions the sale may need to be invoiced by a vendor located in the USA.
Export financing with payment terms from one to five years is arranged by Kadland Capital for equipment sales between $500,000 and $5,000,000 in size. We have the capacity to support larger export financing transactions, but for eight figures and above it’s more typical for Kadland Capital to broker the requisite credit insurance and for a bank/lender to arrange the export financing on its own.
Vendors of smaller-ticket equipment can offer shorter-term export financing to their international customers using export credit insurance, in some cases extending payment terms up to twelve months with no minimum transaction size. Short-term export financing can also be insured for international sales of raw materials, parts, finished goods, commodities, and all other kinds of products and services.
How trade finance is structured
Under a structured international trade finance facility, payment terms extended to a foreign buyer are typically between 90 and 180 days for each export sale. Credit terms up to 360 days may be feasible for durable goods, some agricultural commodities, and other products with long economic life cycles. For capital equipment, export finance can be arranged for creditworthy buyers under loans or leases running five years or longer.
Once an international trade finance facility is activated, each time the buyer submits a purchase order to one of its suppliers it simultaneously signs a promissory note to a lender. The exporter ships the goods, presents documents, and gets paid by the lender. Then the lender gets paid back by the buyer in accordance with the terms of the promissory note and the underlying trade financing agreement.
If payment terms need to be extended to a foreign buyer directly by its suppliers, Kadland Capital can arrange international trade finance between the exporters and a lender . . . under which the suppliers can sell the lender their trade receivables from the foreign buyer upon shipment and presentation of export documents.
In other cases it may be more practical to finance the foreign buyer’s trade payables instead of the suppliers’ receivables. The exporters may already be extending payment terms to the buyer but their lines may not be large enough for the buyer to place additional orders while current invoices are still open. Kadland Capital arranges international trade finance facilities under which a buyer can select payables for a lender to settle early with the suppliers, freeing up supplier credit lines so the buyer can place new orders.
We provide our Trade Finance Facilities in terms of Letter of Credit (LC), Standby Letter of Credit (SBLC), Bank Guarantee (BG), Performance Guarantee/Bond (PG/PB), Bank Comfort Letter (BCL) & etc ., for those who do not have enough Bank Facilities to complete their trade transactions.
• Letter of Credit | L/C
• Standby Letter of Credit | SBLC
• Bank Guarantee | BG
• Performance Guarantee/Bond
• Tender Bond Guarantee | TBG
• Advance Payment Guarantee
• Bank Comfort Letter | BCL